Does Your Business Need a Finance Director? What Exactly Do They Do?
Wondering if your business needs a Finance Director? Find out what an FD actually does, when you need one, and why a good accountant might already have it covered.
Most growing businesses already have access to more financial expertise than they realise. The question isn’t whether you need a Finance Director, it’s whether you’re using your existing accountancy relationship properly.
The FD conversation is constantly raised in business circles, often by people selling fractional FD services, which creates the perception that there’s a gap in your setup that only a senior hire can fill. Sometimes that’s true. More often, it isn’t.
Here’s what a Finance Director actually does, what parts of the job your accountant can do, and what you should ask before you start budgeting for the role.
What does a Finance Director actually do?
The FD role is strategic, not operational. Where your accountant usually focuses on compliance, an FD focuses on direction: where the business is heading financially and what decisions need to be made to get there.
In practice, that typically covers:
· Cash flow forecasting and working capital management
· Financial planning, budgeting, and scenario modelling
· Risk management and internal controls
· Investor relations and fundraising support
· Merger, acquisition, and exit preparation
· Board-level financial reporting
It’s a meaningful scope, and at the right scale, it justifies the cost. Senior FDs in the UK command salaries of £80,000 to £150,000 or more, before benefits. But here’s what that job description doesn’t tell you: a significant portion of those responsibilities can be handled by a well-briefed accountant, particularly one offering management accounts and forward-looking advisory support.
The gap between what an accountant does and what an FD does is often smaller than people assume. The bigger gap is between what business owners ask of their accountant and what their accountant is actually capable of providing.
Who actually employs an FD?
In the UK, Finance Directors are largely found in medium- to large-sized businesses. According to Merchant Savvy’s 2026 business finance data, 65% of SMEs with 50 to 249 employees use some form of external finance, which signals a level of complexity that often warrants dedicated financial leadership.
At the larger end, HMRC classifies businesses with turnover above £200 million as “large,” managing around 2,000 of them through a dedicated compliance unit. These businesses almost universally carry a full-time FD or CFO at board level.
For smaller businesses, the picture is different. Of the 5.7 million businesses in the UK, 99% are small. Only around 8,250 have 250 or more employees. For the vast majority, a full-time FD is neither affordable nor necessary. Even the British Business Bank’s SME Finance Survey consistently shows that smaller businesses rely heavily on external professional relationships, such as accountants, rather than on internal finance hires.
“Most growing businesses don’t need a Finance Director on the payroll. They need Finance Director-level thinking, applied at the right moments.”
The fractional FD: a middle ground that mostly works
The rise of the fractional or part-time FD has opened up senior financial thinking for businesses that can’t justify a full-time hire. A fractional FD typically works one to three days per week at day rates of £600 to £1,500 depending on experience and sector.
This model suits businesses scaling rapidly, preparing for investment, or steering a significant transaction. It’s a legitimate option, but it still adds a level of cost and coordination that sits outside your existing accountancy relationship. Which raises the obvious question again.
Could your accountant already be doing this?
For a significant number of businesses, a proactive accountant is already covering the essentials of what an FD does, or could be, without the overhead of a separate hire.
A strong accountancy practice doesn’t just file returns. It advises on structure, flags risk early, models scenarios ahead of major decisions, and brings the kind of forward-looking perspective that keeps businesses out of trouble. The ICAEW’s guidance on business finance and advisory services makes clear that qualified accountants are equipped to provide strategic input well beyond compliance, yet many business owners never ask for it.
The relationship stays transactional because owners treat it that way. Meetings are rushed, questions are narrow, and the accountant’s broader capability goes untapped.
Before you budget for an FD, ask whether you’re genuinely getting full value from your current accountancy support. Most businesses aren’t.
So when do you actually need one?
There’s no single turnover figure that triggers the need for an FD, but a few conditions make the case clear:
You’re raising external investment. Investors expect financial modelling, scenario planning, and board-ready reporting at pace. If your accountant can’t provide this at the speed required, you need a dedicated resource.
You’re acquiring or being acquired. M&A due diligence is not a job for a part-time external relationship. An FD who owns your numbers is close to indispensable here.
Your cash flow has become genuinely complex. Multiple entities, international revenue, significant stock or work in progress: these create challenges that go beyond compliance.
Your board or investors are asking for it. If the people with money in your business are requesting an FD, the decision has largely been made for you.
Outside of those scenarios, the honest answer for most businesses is: not yet.
The questions worth asking first
Before starting a hiring process, have a direct conversation with your existing accountant. Cover:
· Are we receiving monthly/quarterly management accounts, and are we actually using them to make decisions?
· Do we have a rolling 12-month cash flow forecast?
· Are we getting proactive advice on tax structure and risk, or simply reactive compliance?
· Could we access more strategic input through our current practice without a separate hire?
If the answers reveal a gap, it may be in the relationship. Talk to us about what proactive accountancy support looks like before you commit to a more expensive solution.
Need Help with External Financial Strategy? We Can Help!
A Finance Director adds genuine value at the right scale and the right moment. But for most UK businesses, that moment hasn't arrived yet, and in the meantime, the cost of a premature hire or a fractional arrangement you don't fully need adds up fast.
The smarter move is to get more strategic financial help from an accountant. At Linggard & Thomas, we work with businesses that want proactive financial support, not just year-end compliance. That means management accounts that actually inform decisions, cash flow forecasting that gives you visibility, and strategic conversations that happen before problems surface, not after.
For many of our clients, that level of input removes the need for an FD entirely. For those approaching a point where a dedicated hire makes sense, we help you understand exactly when that is and what to look for.
If you're questioning whether your current accountancy setup is giving you enough, it probably isn't. Get in touch with the team at Linggard & Thomas and let's talk through what more strategic financial support looks like for your business.
